Oak Special Fund Records Its Worst Return at 0.27%, Issues Explanation

Faida Investment Bank has attributed Oak Special Fund (KES)'slow monthly return inOctober 2026, to difficulties across global financial markets, which affected the value of its investments.

In an update to investors after concerns about the monthly performance, it was explained that technology stocks faced heavy selling pressure in October, while local equities and precious metals also recorded declines. The Oak Special Fund recored its lowest monthly return since inception, at 0.27% which translates to an annualised return of 3.27%.

The fund further pointed to uncertainty surrounding US interest rates, inflation and political developments across different markets, which contributed to declining returns for investors.

Oak Special Fund invests across several asset classes, including fixed-income securities, local and international equities, precious metals and other trading strategies.

Faida added that the decline in equity and precious metal prices affected the reported value of the fund's holdings during October. This is because investments are valued using prevailing market prices, even when the underlying assets have not been sold.

“The month was marked by significant movements across global financial markets. Technology stocks faced heavy selling pressure, while local equities and precious metals also declined. Concerns around interest rates, inflation and political developments added to the uncertainty."

“These market movements affected several of our investments at the same time, putting pressure on the Fund's overall performance. We would like to explain what happened, how the Fund responded and what this means for our investors," the statement read in part.

Also Read: Highest Paying Special Funds by Net Returns for Q3 2026

The investment bank however, noted that its fixed-income investments continued earning interest, while some of its other trading strategies generated positive returns. These contributions helped cushion the overall impact of declining market prices.

Faida Investment Bank defended the fund's multi-asset investment approach, explaining that investing across different markets and using various strategies provides alternative sources of returns.

According to the manager, this flexibility allows the fund to pursue returns and manage risk without relying entirely on rising markets. However, diversification does not eliminate the possibility of losses.

The investment manager also clarified its return expectations, noting that the fund works towards a target net return of 20% per year.

However, it emphasised that the figure is an annual investment objective and not a guaranteed return.

Also Read: Special Funds With the Highest Returns in Q1 of 2026

“Oak Special Fund (KES) works towards a target return of 20% per annum, net of fees. This is an annual investment objective, not a guaranteed return.

“It is important to distinguish an annual target from monthly performance. The Fund is not expected to deliver the same return every month, and assessing the annual target against an individual month's result can give a misleading picture of the investment strategy," the update to investors cautioned.

The Oak Special Fund (KES) posted a net return of 3.90% between July and September 2026, an average of 1.3% per month.

An investor who placed Ksh300,000 in the fund at the beginning of the quarter would have earned approximately Ksh11,700, bringing the investment value to Ksh311,700 by the end of September.

The fund's cumulative return from January to September 2026 stood at 12.28% for investors who reinvested their returns.

Special Funds have recently gained popularity as Kenyans seek higher returns amid lower performance among low-risk investments such as T-Bills and MMFs.

Special Funds, however, have a mid to high risk rating and sometimes use leveraged investments - meaning fund managers stand the risk of losing both the target gains and the principal received from investors.

For investors, the risk of lost capital does not absolve them from management fees owed to fund managers. The fund's management fees are calculated before returns - meaning an investor can make a loss and still be required to pay the agreed management fees - typically 5% for Special Funds.